Offshore investment remains steady in Panama, and that means lots of opportunities for business and banking. One of the most functional and feasible options in this region when it comes to business, retirement, or relocation is to open a Panama bank account as soon as you can. Panama has long had a reputation for secure offshore banking, and has very favorable laws for both offshore investors, and residents. If you want to open a bank account in Panama, however, you’ll need to do a few things ahead of time to prepare. The process is much easier than practically every country in Latin America, and with a small investment and a good lawyer, this can be done quickly, and painlessly. Here are 5 solid steps you’ll need to take before you open a bank account in Panama:
1. Pick the right bank.
With over 100 different banks operating out of Panama, finding the right one is not only important; it’s a bit of a challenge. Your best bet is to check and see if your current bank operates in Panama first. You can open a bank account in Panama with the same institution, but as a separate entity, which makes it easier to move money between accounts, and expedites the acceptance process. Another tip is to find small, yet reliable banks that offer great interest rates as an incentive to increase business.
2. Prepare your documents and funds well in advance.
As is the case in many parts of Latin America, getting financial institutions to process documents can take more time than expected, so get a head start well in advance. If you’re looking at relocating to or investing in Panama in April, apply for a bank account in September. It only takes $1,000 to open an account in most banks, but you’ll also need to provide multiple references, identification, work certificates, tax returns, and proof of income.
3. Make sure your taxes are up to date.
While Panama once had a reputation for being a tax haven, both the US and Panama have gone to great lengths (see FACTA) to turn this around. If you plan to open a bank account in Panama, first check with your accountant that you have no withstanding taxes, or audits from your country’s tax administrators. This will ensure that your finances are protected once in the country and that the Panamanian banks can’t put a hold on any of your funds.
4. Start building credit in Panama.
If you’re simply putting money away for investment purposes, this isn’t necessarily helpful. But if you want to relocate to retire or start a small business, this can be really beneficial. Even if your credit is less than solid in your home country, you can easily start to build credit through your Panamanian bank. This will give you lots of flexibility for small business loans, mortgages, and automobile loans. You can start this process as soon as your bank account is approved; whether you’re physically in the country or not.
5. Have a bilingual attorney assist you.
While many of Panama’s banks will have English speaking associates, especially on the top level, it’s not a guarantee, and a lot can be lost in translation. If Spanish is your first language, or you’re bilingual, this obviously isn’t going to be an issue. However, many offshore investors and expats don’t have this luxury. If you have a local attorney or trusted accountant who is fluent in both languages, you can make sure that communication is clear on all sides. Miscommunication can be costly, and that’s something you can’t afford when you open a bank account in Panama.